Business / Companies
Debt ridden Hwange Colliery faces imminent liquidation - report
13 Dec 2015 at 06:09hrs | Views
HWANGE Colliery Company Limited (HCCL) which is faced with a legacy debt of $160 million risk liquidation, a report by an external consultant has revealed.
Hwange Colliery is set for a major comeback if it adopts recommendations made by an external consultant
The coal mining firm also risk losing information as its IT systems are frequently switched off over non-payment for modules or facilities and implementation fees.
The HCCL Short-Term Way Forward Due Diligence Report dated November 19, 2015; which remains a proposal until the main board adopts some of its findings and recommendations says the Board is alive to what needs to be done to move the company forward but "a small push is what is required for the driver to take off".
Reads the report in part: "The biggest risk now facing HCCL is that of liquidation. The second significant risk facing the mine is that of loss of information due to IT systems being switched off for non-payment for modules/facilities and implementation fees."
According to the report, HCCL has been unable to arrest the plunge in production in the last four years.
The report urged the company to implement a raft of measures, including selling off employee houses, labour rationalisation and widening contract mining, if it is to reduce debt and return to viability.
Given the potential change in the business model from "own mined coal" to "contractor mined coal", there could be a strong case for staff rationalisation.
Hwange Colliery is set for a major comeback if it adopts recommendations made by an external consultant
The coal mining firm also risk losing information as its IT systems are frequently switched off over non-payment for modules or facilities and implementation fees.
The HCCL Short-Term Way Forward Due Diligence Report dated November 19, 2015; which remains a proposal until the main board adopts some of its findings and recommendations says the Board is alive to what needs to be done to move the company forward but "a small push is what is required for the driver to take off".
Reads the report in part: "The biggest risk now facing HCCL is that of liquidation. The second significant risk facing the mine is that of loss of information due to IT systems being switched off for non-payment for modules/facilities and implementation fees."
According to the report, HCCL has been unable to arrest the plunge in production in the last four years.
The report urged the company to implement a raft of measures, including selling off employee houses, labour rationalisation and widening contract mining, if it is to reduce debt and return to viability.
Given the potential change in the business model from "own mined coal" to "contractor mined coal", there could be a strong case for staff rationalisation.
Source - Sunday Mail
